Ohio Bribery Investigation Turns to State Pension
Funds

June 15, 2006 (PLANSPONSOR.com) - An investigation
of the Ohio Bureau of Workers' Compensation regarding bribery
for investment contracts has expanded to include the state's
five public pension funds and the Ohio Treasurer's
office.

The Associated Press reports that Franklin County
Prosecutor Ron O’Brien confirmed that the funds are being
looked at because the top 10 or 15 brokers doing business
with the Bureau contain many of the same firms that handle
investments for the funds.
“However, whether there is anything illegal is as yet
unclear,” O’Brien said, according to the AP.

A large law enforcement task force is investigating
a state investment scandal that began with rare-coin
dealer Tom Noe’s contracts with the workers’ comp agency.
Noe is accused of stealing more than $1 million from the
coin fund, the AP reports. The former executive in charge
of investments at the workers’ comp agency says Noe
bribed him to help secure the coin contract, but Noe
denies that.

The first bureau official to be convicted in the
year-long scandal was Terrence Gasper, the Bureau’s
former chief financial officer. He pled guilty in state
and federal court to accepting stays at a Florida condo,
money for his son’s tuition and other gifts in exchange
for doling out investment business. Prosecutors say more
charges are expected this month.

Other convictions in the scandal include:

In 2004, three associates of then-Ohio
Treasurer Joseph Deters were convicted in a
pay-to-play scandal, in which preferential treatment
of brokers was linked to campaign
contributions.

The former executive director of the State
Teachers Retirement System (STRS), Herb Dyer, was
found guilty last fall of accepting golf outings and
other gifts from a firm that advised the fund on its
investments (See
Ohio STRS: Dyer Charged with Taking
Consultant Gifts
).

A 2005 voluntary audit by the Ohio Public Employees
Retirement System (OPERS) found that a new, more
stringent ethics policy adopted in 2002 significantly
reduced gift-giving to employees. The review found that
before the policy members of the investment staff were
regularly entertained by those doing business with OPERS,
but after the new policy was adopted, there were fewer
occurrences.